Amazon.com Inc (Nasdaq: AMZN) reported a swing to a loss in the fiscal 2022 second quarter, primarily due to its stake in electric vehicle manufacturer Rivian (RIVN). While the second-quarter earnings missed estimates, revenues surpassed Wall Street expectations. The e-commerce giant also issued an upbeat Q3 revenue outlook. This enabled the shares of Amazon to gain 10.36%, or $12.67, to trade at $134.95.
Seattle, Washington-based Amazon reported second-quarter revenues of $121.20 billion, an increase from $113.10 billion in the comparable quarter last year. Analysts surveyed by Refinitiv had anticipated the company would record revenues of $119.09 billion.
In the recent quarter, which ended June 30, 2022, the company posted a net loss of $2 billion, or $0.20 per share, compared with a net profit of $7.80 billion, or $0.76 a share, in the quarter ended June 30, 2021. Analysts polled by Thomson Reuters had anticipated Amazon to post earnings of $0.13 per share.
The company incurred a valuation loss of $3.90 billion concerning its investment in electric vehicle manufacturer Rivian Automotive, Inc. The pre-tax figure was accounted for as non-operating expenses. The shares of Rivian slumped 49% in the second quarter. For the year-to-date, Amazon has lost $11.50 billion from its investment in Rivian. Specifically, in the June 2022 quarter, the company lost $2 billion.
Operating income, devoid of the company’s investment-linked loss, dipped to $3.30 billion in 2Q 2022 from $7.70 billion last year.
By the nature of business,
- Net product sales fell by 2.50% y-o-y to $56.575 billion.
- Net service sales were $64.659 billion, up 17.40% from last year.
Segment wise,
- North America’s revenues were $74.43 billion, an increase of 10% from the prior year.
- International revenues were $27.07 billion, down 12% on a y-o-y basis.
- Amazon Web Services revenues surged 33% y-o-y to $19.74 billion, surpassing StreetAccount estimates of $19.56 billion. Operating income was $5.70 billion, representing nearly all of Amazon’s profit.
Amazon reported an 18% rise in advertising revenues to $8.76 billion, comfortably beating StreetAccount consensus of $8.65 billion. Furthermore, the company’s online store division recorded a decrease of 4% on a y-o-y basis. Interestingly, physical store revenues grew by 12%.
Looking ahead, the company forecasts third quarter revenues in the range of $125 billion to $130 billion, reflecting a growth rate of between 13% and 17%. Analysts polled by Refinitiv anticipate revenues of $126.40 billion.
The mixed quarterly results and upbeat Q3 revenue outlook are expected to keep the stock of Amazon range-bound in the short term.
The historical price chart indicates that the stock of Amazon is ascending after testing the support at 105. The next resistance is anticipated at around 170. Additionally, the MACD indicator shows a positive reading. Therefore, we anticipate the stock to remain in an uptrend in the near term.
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